PENLAND: It's a small enterprise, but one that has grown rapidly in the past five years. Lytvinenko says it all started when he and his wife took apart a pair of jeans in their apartment and made a pair of their own. Back then, all they could afford were old sewing machines.

VICTOR LYTVINENKO: Our button hole machine is from 1941. And it has a counter on one side of it that goes up to a billion and I love that. I love that it was implied that it would go up to a billion.

PENLAND: What is the counter?

LYTVINENKO: How many button holes it's done.

PENLAND: So how many has it done?

LYTVINENKO: It looks like 583 million. About halfway to a billion.

(SOUNDBITE OF LAUGHTER)

LYTVINENKO: Isn't that cool?

PENLAND: Today those antiquated machines are integral to what make Raleigh Denim jeans unique. And expensive. A pair runs between $200 and $300.

LYTVINENKO: Our business model is different. We're really focused on making the best product that we can with the best style and the best story. We cannot compete on price, we cannot make a cheaper jean.

PENLAND: Raleigh Denim's business model is a departure from North Carolina's denim legacy, which focused on mass production. But the fledgling startup wouldn't exist if it weren't for those early denim pioneers. Lytvinenko not only bought the old machines, he learned from people that used to work in the old factories.

CHRISTEL ELLSBERG: My grandmother, she said, why don't you learn how to sew, you will always have work.

(SOUNDBITE OF LAUGHTER)

ELLSBERG: But she was right. I'm still working.

PENLAND: That's patternmaker Christel Ellsberg, who began as a custom tailor in Germany more than 60 years ago and who used to work at Levi-Strauss. As denim work dwindled, Ellsberg took jobs that had nothing to do with her expertise. And then she heard about Raleigh Denim from her hairdresser.

ELLSBERG: So, I was here the next day and I've been here ever since. At least it is something that I know how to do, you know, rather than jobs that I took because I had no choice.

PENLAND: Even in a down economy, Raleigh Denim's approach to making locally sourced, hand-crafted jeans has proven successful.

LYTVINENKO: I want things that are made nearby. I want things that I know are made responsibly that aren't polluting the earth. It's essentially everything that we've that our collective community has embraced in food - is what we're doing in fashion and in clothing.

PENLAND: Raleigh Denim started with two employees, now it has 19, and its jeans are sold at Barney's and other high-end boutiques. It's an unlikely story in a state that has seen its textile industry drastically shrink. In the last 15 years, more than 40 percent of the factories have closed their doors.

LYTVINENKO: A lot of the industry then was focused on price. And I think that's a lot of the reason that the vast majority of it has moved over seas. And I think that is the reason that we are in business and growing. We're trying to take as much as we can of the history and heritage of the textile industry - of the denim industry in North Carolina - and build from it and do something new with it.

PENLAND: Lytvinenko never goes too long without looking back on North Carolina's denim history, and whenever he wants to look at the history of his own growing company, he visits a closet in his office where he keeps old, worn-out jeans.

LYTVINENKO: So, this is my secret stash of old jeans. I kind of come back here in this closet every now and then to remind me how far that we've come and also to look at how beautiful the jeans are.

Lytvinenko says each pair of jeans holds memories. As for Raleigh Denim jeans, they tell the story of North Carolina's textile past, and perhaps, future.